Digital revenue and packaged game sales driving growth at Sega Sammy

Digital and phsyical games are helping to drive growth at Sega Sammy, which saw both sales and profits increase during the fiscal year ended March 31, 2020. 

According to the company's latest financials, consolidated full-year sales rose by 10.5 percent to 366.5 billion yen ($3.4 billion), while profits rose by 421 percent to 13.7 billion yen ($127.9 million). 

That upswing was partly down to the positive performance of Sega's entertainment contents division, which houses its video game business. 

Net sales in the segment increased by 12.8 percent to 247.7 billion yen ($2.3 billion), while operating income rose by 50.9 percent to 14.8 billion yen ($138.2 million). 

Digging a little deeper into those figures, revenue from digital game sales rose to 47.2 billion yen ($440.9 million) from 40.8 billion yen ($381.1 million), with Sega highlighting Phantasy Star Online 2, Fist of the North Star Legends Revive, and Shin Megami Tensei Liberation Dx2 as its top three digital titles.

Packaged game revenue increased to 78.2 billion yen ($730.6 million) from 54.6 billion yen ($510.1 million), with unit sales of retail titles rising to 26.7 million in FY19 from 23.4 million in FY18. 

"In the digital game software field, the Group recorded transient sales such as title transfers and offering titles. Also sales of existing titles in operation have been performing solidly. Besides, expenses substantially decreased due to the impairment loss on fixed assets recorded in the previous fiscal year," explained the company. 

"In the packaged game software field, the Group sold repeat titles steadily though expenses increased, partly as the result of the amortization of development expenses due to multiple releases of Total War: Three Kingdoms and Mario & Sonic at the Olympic Games Tokyo 2020."

Discussing the impact the COVID-19 pandemic had has on its business, Sega explained that despite employees continuing to work from home, its development schedule for both digital and packaged game is under threat. 

It also noted that some game events and updates have been postponed due to development delays, and said that while growth is being seen in the area of overseas download sales, overall sales schedules could be impacted if the situation continues.

Due to the current uncertainty caused by the coronavirus outbreak, Sega has postponed its forecast for the fiscal year ending March 31, 2021.